The X Factor judge met the lo-fi band on Irish TV show Tubridy Tonight and told them that their track 'Death to Los Campesinos!' was a "hit single".
Speaking to NME, Walsh said: "I love that song. There's a really good vibe about the band, there's an innocence that is very nice about them.
"I don't think the business has tarnished them yet, and I hope it doesn't. And it's great to see three girls and four boys together. Historically that doesn't happen much."
When asked by the band if he would ever be their manager, he replied: "You would hate me! I'd try be trying to get you on everything, I would burn you up. I'd put you everywhere and you'd probably lose your credibility."
Talking about the band's chances on a show like X Factor, he added: "I would put them through on the vocals alone. On the strength of the a capella, I would absolutely put them through.
"Sharon [Osbourne] would get it immediately, Simon [Cowell} wouldn't get it because it's not contrived enough for him. Dannii [Minogue] probably would like it because she likes quirky pop."
Los Campesinos! released their debut album Hold On Now, Youngster... last month.